Elektrobit sign two contracts

Finland based Elektrobit signs two Memoranda of Understanding within its Wireless Communication Solutions segment.

Elektrobit has signed two Memoranda of Understanding concerning its Wireless Communications Solutions business. The first one is done by Mobile Terminal Solutions unit and covers the partnered ODM delivery of a mobile terminal product, based on the earlier announced 3G smart phone reference design, for a major handset manufacturer. The second, done by Radio Network Solutions unit, concerns the supply of mobile WiMAX standard based module products to a major telecommunications provider.

Consequently, Elektrobit will invest considerably in the new products development as well as in the development of the production partnering capability stipulated by the new business model. The total investment increase during the second half of the year 2006 is approximately eur 10 million.

A part of Elektrobit development resources used in the R&D services business model will be directed to the development of the new business model and products. This, in turn, will have an impact on the net sales and earnings development of the rest of the year. The new projects are expected to accumulate turnover starting from the end of the year 2007.

The group estimates the net sales of the year 2006 to remain substantially on the same level as in 2005. The whole year operating profit is expected to be less than half of the operating profit level of 2005.